Abel's Buying Spree Meets a GEICO Snag: Inside Berkshire's Mixed Second Quarter
Published on 09/14/2026 at 05:41 | Editorial boerse-global.de
Greg Abel has wasted little time putting his stamp on Berkshire Hathaway. After 14 consecutive quarters of net equity sales, the new chief executive flipped the script in the second quarter of 2026, purchasing $23.5 billion worth of stocks against just $3.7 billion in disposals — a net inflow of nearly $20 billion. The shift marks Berkshire's return as a net buyer of equities for the first time in more than three years, and it signals a more aggressive posture than his predecessor's final stretch at the helm.
The first-half tally reinforces the pivot. Across the opening six months of 2026, Berkshire acquired $39.4 billion in securities and shed $27.8 billion, reversing a long-running pattern of selling more than it bought while amassing a towering cash reserve.
Operations Deliver, Insurance Doesn't
That renewed appetite rests on a solid operating foundation. Second-quarter operating earnings climbed 16% to $12.98 billion, with Berkshire Hathaway Energy up 27% and the BNSF railroad ahead 6%. The manufacturing, services and retail segment improved 24% to just under $4.5 billion. Net income attributable to shareholders more than doubled to $25.7 billion, buoyed largely by investment gains.
Insurance proved the weak spot. Underwriting profits slipped 13%, and GEICO's core earnings collapsed 45%. Even so, per-share operating profit of $6.02 comfortably beat the $5.13 analysts had penciled in. The insurance float — capital Berkshire deploys without paying interest — grew to roughly $177.5 billion as of June 30, an increase of about $1.1 billion since the end of 2025.
Should investors sell immediately? Or is it worth buying Berkshire Hathaway?
Cash Pile Retreats From Record
Berkshire's war chest, meanwhile, is no longer expanding. Cash reserves fell 8% to $365.5 billion at the close of the second quarter, down from a record $397.4 billion three months earlier. Stripping out BNSF cash and Treasury bills, the decline was 3.8% to $359.2 billion. Buybacks ran alongside the equity purchases: roughly $4.5 billion of Berkshire's own stock was repurchased in the quarter, bringing the first-half total to about $4.8 billion.
The spending spree isn't confined to securities. NetJets, a Berkshire subsidiary, filed construction plans last week for a campus at Dallas Love Field costing between $35 million and $70 million and spanning more than 100,000 square feet. The project will roll out in three phases, with completion targeted for May 2028.
A Familiar Pattern of Underperformance
Against the broader market, Berkshire's stock has lagged. It sits about 2% higher year-to-date, while the S&P 500 gained roughly 11% through mid-September. History offers some comfort: since 1990, there have been nine years in which Berkshire finished at least 10 percentage points behind the index, and in seven of those nine, the stock went on to beat the S&P 500 the following year.
Recent trading has been steadier. The shares closed Friday at EUR 660,000.00, up 0.8% on the day and 1.7% on the week, according to one reading, while a separate tally put the seven-session gain at 1.0% and the year-to-date advance at 3.6%. The stock remains 3.8% below its 52-week high of EUR 686,000.00, set on August 10. An RSI of 55.9 places it in neutral territory, with no sign of overheating or selling pressure.
For investors, the story is a split screen: resilient operations, a shrinking but still enormous capital cushion, and a new CEO willing to deploy it. Whether Abel keeps channeling the cash into buybacks and targeted stakes will likely matter more to the share price in coming quarters than the gap to the index.
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